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February 14, 2024
by David Goodale

Why Is It Harder To Get A Merchant Account If You Process Large Ticket (Expensive) Transactions?

(Slightly edited from video transcript for greater readability)

Key Takeaways

Cardholder Protection
The cardholder must get what they paid for, and if they don't the money must be returned to them.
Risk to the Payment Processor
A stable business with a good track record of sales and anti-fraud measures presents a lower risk to a payment processor and is able to be approved to process large ticket sales.
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Hello, David here at Today I'm tackling a very frequent question that I get asked. It surprises a lot of merchants in the process of applying for merchant accounts. The question is, why do large ticket and expensive transactions make it so much harder to get approved when you're opening a merchant account? Stay tuned, and I'll explain why in just one second.

Cardholder Protection

When you process a credit card transaction, the cardholder has to get what they paid for, and if they don't, they get their money back. This is the core principle cardholder protection rule built into Visa and MasterCard credit cards, and it's a wonderful benefit for consumers.

big ticket

It's a problem though, for merchants and ultimately for processors because, that money has to come from somewhere. I'm holding a little remote clicker that I use on my prompter here. This thing is worth maybe fifty dollars or something like that. If I attempt to buy one of these using a credit card and I don't get it, I'm owed my money back. Fifty dollars that's not too large of an amount, but if I happen to be buying gold bullion worth a million dollars which never shows up, that is a huge problem. Now if I file a dispute and win, I have to get my money back as a cardholder, it means that the payment processor and the merchant are responsible for that million-dollar loss.

Large transactions are high risk

The cardholder must get their money back and that money comes from the merchant. If the merchant doesn't have enough money because the merchant went out of business or just disappeared, it still has to go back. In that case it comes from the credit card processor. The bigger the transaction, the higher the risk to the payment processor. There are things you can do to combat risk so it doesn't look like a negative mark on your business when trying to open a merchant account. For example, if you can work with your credit card processor and explain, hey, yes, we do very large tickets, but let's say it's a travel agency. We sell to very high net worth individuals and they are almost all return guests, for any customer that we're doing a first-time sale to, we always have them send a copy of their photo ID or their passport and we will do a phone call verification to ensure their identity. These are just things that you can do. What you want is to have controls in place so that if you are selling a high-risk product.

Merchants should demonstrate proof of a stable business

The payment processor wants to know two things:


They don't want you to sell a bunch of stuff, get a bunch of money sent to you, and then as the merchant, you disappear and run off to Tijuana, with the money that the payment processor now has to return to cardholders who never got what they paid for.

Demonstrate proof of a stable business

You could say to the payment processor, hey, we've been in business for 10 years. Here's our last three years audited financial statements from the CRA or the IRS. If it's a really big account, you could offer to fly in and meet the team and explain what you're trying to do. It sounds so obvious when I say it out loud, but merchants don't think of it. Show proof that you have a legitimate business. Demonstrate it with supporting documentation and have good fraud controls in place. You and the processor are both on the same side, neither of you want to lose money, demonstrate your ability to process large tickets securely. I don't need to go on too much more.


This is a very simple short concept. If you do have a business where you process particularly high or particularly large transaction sizes and you find it's hard to get a merchant account or the processor's holding big amounts of money back, reach out to us at because we may be able to help. Thanks for watching and have a nice day there. Bye now.

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David Goodale About the Author

My name is David Goodale, CEO at Merchant I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.

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